Payment Card to Open Banking Converter for Contactless Settlement

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Solution Overview

Problem

Conventional open banking APIs do not support end-to-end settlement and end-to-end transaction management for contactless payments, limiting their ability to facilitate digitized bank account-based contactless payments and not meeting the Strong Customer Authentication requirements for offline transactions.

Innovation Solution

A payment card network-to-open banking network converter is used to convert contactless payment messages into open banking messages by obtaining a unique B2B trust token, enabling the open banking API channel to manage the POS contactless transaction lifecycle and support end-to-end settlement and transaction management.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If conventional open banking APIs are used for contactless payments, then financial institutions can participate in open banking through existing APIs, but the system cannot support end-to-end settlement and end-to-end transaction management for POS contactless transactions

Engineering Contradiction:

Improveopen banking API support for contactless paymentsVSAvoidend-to-end settlement capability

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

A converter is introduced as an intermediary component between the open banking network and the payment card network. The converter receives contactless payment messages from the payment card network, converts them to open banking messages, and forwards them to the open banking network. This intermediary enables the open banking network to process contactless payments while maintaining the required end-to-end settlement and transaction management capabilities through the payment card network's proven APIs.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If payment card network APIs are used for contactless payments, then end-to-end settlement and transaction management are supported, but the system cannot leverage the open banking network for scale and acceptance

Engineering Contradiction:

Improveend-to-end settlement capabilityVSAvoidopen banking network integration

Core Design Contradiction:

ReliabilityVSAdaptability or versatility

Solution Approach 1:

The converter acts as a bridge that allows the open banking network to access payment card network capabilities. By converting open banking messages to payment card network messages and vice versa, the converter enables the open banking network to leverage the established payment card infrastructure for reliable settlement while still benefiting from the open banking network's scale and acceptance.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The converter provides multi-functionality by handling multiple message types and protocols. It can convert various contactless payment messages (authorization, settlement, transaction management) between the payment card network format and open banking format, making the system universally compatible with both networks and enabling diverse payment operations through a single interface.

Inventive Principle:

Principle #6Universality (Multi-functionality)

3Ease of manufacture

If conventional open banking API channel is used, then financial institutions can access existing open banking infrastructure, but the channel lacks the semantics to manage POS contactless transaction lifecycle

Engineering Contradiction:

Improveopen banking infrastructure utilizationVSAvoidPOS contactless transaction management

Core Design Contradiction:

Ease of manufactureVSEase of operation

Solution Approach 1:

The converter serves as a semantic translator between the open banking API channel and the payment card network protocols. It translates the simplified open banking message format into the detailed payment card network message format that contains the necessary semantics for managing POS contactless transaction lifecycle, including authorization, clearing, and settlement operations.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The converter segments the complex transaction management functionality into distinct message conversion operations. It handles different aspects of the transaction lifecycle separately - converting authorization requests, settlement messages, and transaction management commands - allowing each to be processed through the appropriate protocol while maintaining the overall transaction flow through the open banking channel.

Inventive Principle:

Principle #1Segmentation

Data Source

PatentUS11669834B2Contactless payment technology with payment card network to open banking network conversion

Publication Date: 2023.06.06 MASTERCARD INT INC

AI summary

Through the described contactless payment technology with payment card network to open banking network conversion, the open banking network can be leveraged to bring acceptance for digitized bank account based contactless payments. A converter can receive, via a payment card API channel, a contactless payment message, which includes at least a consumer account number, an acquirer account number, and transaction information for a transaction. The converter can convert the contactless payment message to an open banking message by obtaining a unique B2B trust token corresponding to the consumer account number and creating the open banking message for an open banking API channel using at least the B2B trust token, the acquirer account number, and the transaction information. The converter can communicate, via the open banking API channel, the open banking message to a consumer bank system.